Withdrawal: Tobacco money evaporating

When Crispin, Porter & Bogusky began work on Florida's youth anti-smoking account five years ago, $24 million was spent on marketing for the effort that garnered a media grand prix at Cannes and inspired the national "Truth" campaign operated by the American Legacy Foundation.

Last week, the state voted to all but eliminate the program, dropping funding to $1 million. "For all practical purposes the Florida state work has ended," said Jeff Hicks, president of Crispin Porter, Miami. "You can't have the kind of impact in broad based media that was needed."

Florida isn't alone. Other states are also cutting back, and even the future of the nationwide "Truth" effort is uncertain at this point.

Advertising agencies squeezed by clients in the economic downturn had been able to rely on state and federal anti-smoking programs to pay the bills, but as states stare down budget deficits, ad agencies are being forced to do more with less.

"In 2003, we estimated that around $200 million has been cut from tobacco programs," said Danny McGoldrick, research director for the Campaign for Tobacco-Free Kids, reeling off a list of states making huge cuts; among them Indiana, Colorado, Maryland and Florida. "There is a lot at stake for ad agencies."

The American Legacy Foundation, which is behind the "Truth" effort, received what could be its final payment from the tobacco companies in March 2003. (The funding agreement with big tobacco requires them to pay only if their collective market share exceeds 99.05%, which it currently does not). While the foundation has a sizeable rainy-day fund, and intends to find other ways of financing itself-net assets are currently $740 million-its operating budget will fall from $177 million to $155 million in 2004.

Chris Cullen, exec VP-marketing and communications for the foundation, said its marketing budget won't see any significant reduction for the time being. The foundation has currently re-upped its contracts with Havas' Arnold Worldwide and Crispin Porter to continue "Truth." The foundation will spend around $50 million on the program this year, and has brought on board Omnicom Group's GSD&M, Texas, a new roster agency, for a $10 million cessation program. A PR review is ongoing.

little outcry

Despite evidence that marketing campaigns are having a drastic effect on smoking rates across the country, Mr. McGoldrick is frustrated that there is such little outcry about the cuts in programs. He is urging ad agencies to become more vocal about their work to help protect budgets.

"We had gone through lean times even before the economy turned; a couple of clients had merged and gone away," said Louie Laurent, CEO of Zimmerman, Laurent & Richardson, Des Moines, a $20 million shop which handles Iowa's anti-smoking account. "[The account] was a shot in the arm for us and really put us back on the map regionally at a time when we really needed that to happen."

The Iowa Department of Public Health's Division of Tobacco Use Prevention and Control initially spent around $3.5 million (June 2001-2002) though the money has since been halved to $1.2 million to $1.5 million. The cutbacks have served to make the agency more resourceful. "The budget cuts were so substantial that we downgraded the quality of production, which made us far more creative and the kids liked it more raw," Mr. Laurent said. A controversial billboard campaign, featuring people with mouth cancer, now runs on a less expensive Web site.

Clarity Coverdale Fury, a $75 million Minneapolis agency, has two anti-smoking accounts: Minnesota Partnership For Action Against Tobacco, aimed at adults, and Target Market, a program funded by the state government and aimed at teens. The two programs have combined billings of $9 million.

While MPAT's $3 million to $3.5 million budget is protected, the funding for Target Market is on the guillotine. Minnesota Governor Tim Pawlenty has proposed it be eliminated. "It is hard to lose business because it doesn't make you feel good," said Creative Director Jerry Fury, but on the upside, he says the work has given the agency a new string in its bow-the ability to connect with teens.

meeting goals

The Neiman Group, Harrisburg, Pa., which has total billings of $58 million, operates Pennsylvania's youth oriented anti-smoking program worth around $7 million-the agency's largest account. "This is lifesaving work and it is especially gratifying," said Tim Reeves, a partner in the agency, and previously a spokesman for the former governor of the state Tom Ridge. Neiman's challenge was to prevent stores from selling tobacco to minors, and it helped reduce those sales from 28% to 14% within one year, according to the agency. Pennsylvania's anti-smoking budget for the fiscal year starting July 2003 is likely to drop only slightly below the $7 million mark.

"The states are under siege, we are living in bad budget times," said Mr. McGoldrick.

The result is the end of some well-regarded efforts like Florida's. "This campaign was part of popular culture. It had more in common with Nintendo and Mountain Dew than other social marketing campaigns," said Crispin Porter's Mr. Hicks. "We've been a beneficiary of the state anti-smoking ad program, but more importantly the state has benefited," he added. "Lots of lives have been saved along with an estimated $1 billion in future health care costs."